Disproving Knight’s Predatory and Stupid Theory of Toll

7 Pages Posted: 21 Dec 2013 Last revised: 10 May 2019

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

Date Written: December 19, 2013

Abstract

Toll and its robber barons were things of the past, and should not exist any more, if not for a theory by Frank Knight. This paper disproves his net gain argument, and shows contrarily that toll inflicts immense external loss and functions like demolishing a good road. This paper also uses Knight’s own inelastic demand to disprove his congestion argument, and corrects him that a good new road is meant to solve congestion on the bad old road. Finally, this paper works out the optimal toll for private roads, to show in contrast that Knight’s toll is both predatory and stupid.

Keywords: Traffic, Toll

JEL Classification: R41

Suggested Citation

Choi, Hak, Disproving Knight’s Predatory and Stupid Theory of Toll (December 19, 2013). Available at SSRN: https://ssrn.com/abstract=2369893 or http://dx.doi.org/10.2139/ssrn.2369893

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

No.1, Chiehsou N. Road
Changhua City, 500
Taiwan
+886 91 901-4618 (Phone)

HOME PAGE: http://euntold.wordpress.com

Chung-Hua Institution for Economic Research ( email )

75, Changhsin St.
Taipei
Taiwan

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